TikTok Accused of Running a Crypto-Like Business Through TikTok Coins 

Bittime - TikTok accused run a business similar to crypto asset exchange through its virtual asset system, TikTok Coins. 

This attracted the attention of the British financial authorities, Financial Conduct Authority (FCA), which got a warning regarding potential violations of anti-money laundering and terrorist financing regulations.

TikTok and TikTok Coins

TikTok Coins system allows users to purchase virtual coins with real money, which can then be used to award prizes within the platform, especially in live broadcast. 

Not only that, TikTok Coins can also be exchanged back into cash indirectly via the program creator that TikTok offers. This process is very similar to transactions normally carried out on the platform crypto asset exchange.

Because of that, experts suggest that TikTok Coins should be monitored more closely as it may require the same regulatory compliance as other crypto asset exchange platforms.

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TikTok Coins Spark Concern

This allegation first surfaced when TikTok users began to realize that they could purchase coins with real money and then use those coins within the platform.

However, what has regulators on edge is the ability for users to exchange those coins back for cash through the creator program, which makes the process similar to a crypto transaction.

This is what causes TikTok Coins to have similar characteristics to crypto assets, prompting concerns that TikTok may be operating without complying with strict financial regulations.

TikTok Coins Potentially Violates Regulations

Based on the explanation above, TikTok can be categorized as a financial services business based on applicable regulations in the UK. 

If proven, TikTok will have to comply with anti-money laundering and terrorist financing laws, including registering its business with the relevant authorities and fulfilling reporting obligations.

TikTok, through its rewards program and TikTok Coins, has the potential to facilitate the transmission of funds to financial services businesses and exchange crypto assets for fiat currency or vice versa. 

This could mean that TikTok not only runs a social media platform, but also indirectly operates as a digital asset exchange.

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